PS Bank seeks to raise P3B via debt notes sale

Philippine Savings Bank, the thrift banking arm of the Metrobank group, expects to raise P3 billion from the sale of debt notes qualifying as tier 2 or supplementary capital early next year.

The exercise is aimed at boosting its cash hoard for potential acquisitions.

In a briefing on Friday, PSBank president Pascual Garcia III also said the bank would likely end this year with a record-high net profit of P2 billion despite a weaker-than-expected demand for consumer loans.

For next year, PSBank is projecting net profit to grow by a 10 percent to P2.2 billion.

PSBank, which now has a 200-branch network, opens around 20 additional branches yearly. The bank is also considering to expand outside of “organic growth.”

“We’re doing a tier 2 exercise to get additional capital. This is for prepping up … we’re putting ourselves in a position to acquire,” Garcia said.

Although the bank was not about to sign any buyout deal at this time, Garcia said it was in the lookout for opportunities. It has decided to do the fundraising early to avoid scrambling for funds when  need arises, Garcia said.

The thrift bank has mandated Dutch financial giant ING to arrange the tier 2 offering, slated for January or February next year.

The tier 2 notes will have a tenor of 10 years with an option for the bank to redeem on the fifth year, or pay higher interest rate.

For 2012, Garcia said the domestic economy could still grow by 4.5-5 percent—better than recent forecasts made by foreign institutions—because the government would have the leeway to step up spending and counter the impact of a global slowdown.

He said external headwinds would still be there to influence domestic output.

“I look to the government sector to be more active next year. That will help counter the effect of external shocks in the local economy,” he said.

Garcia thinks monetary authorities would likewise help by easing key interest rates by 25 basis points by the first quarter of 2012.

For PSBank, Garcia said the bank would likely reach this year the P2-billion bottomline mark, a new milestone for the bank.

In the first nine months of this year, the bank booked P1.55 billion in net profit, up by 1 percent from a year ago, as higher earnings from loans and investment made up for the slack in trading gains.

“It will be slightly higher next year,” Garcia said, projecting a profit growth of at least 10 percent.

He said there would be opportunities to expand the loan book for small and medium enterprises. If the government’s infrastructure-building programs would gain steam, he said this would perk up loan demand among top-tier corporations.

He said consumer lending might be challenging initially as weak global conditions were curbing demand for mortgage and automobile loans.